Interview: Sir Tim Clark, CEO Emirates, on his new Business Class, success of Premium Economy

On Thursday, Rob and I donned our suits and headed to the Aviation Club lunch in Mayfair. We were there to hear what Emirates President and CEO Sir Tim Clark had to say, both about his own airline and the industry as a whole.

Sir Tim covered a huge amount of ground over more than an hour, including comment on Rolls Royce, Airbus, Boeing’s challenges and Heathrow’s third runway. I hope to cover all of this in another article.

More interesting for us, and what I am covering today, was what he had to say about the new business class coming on Emirates’ new A350s (arriving this year) and the success of their premium economy cabins, which we reviewed here.

Premium economy has been a huge success

Emirates was late to the game introducing a premium economy cabin on its long haul aircraft. Whilst Virgin Atlantic and EVA Air introduced the new class way back in 1992, Emirates only rolled it out in 2021 as part of its A380 refurbishment program.

This is despite the fact that premium economy is a massive money-maker for many airlines. Lufthansa says that premium economy makes more money per square metre than any other cabin, despite only introducing it in 2014. IAG was also singing its praises in its 2023 results announcement yesterday.

Lufthansa claims it generates 6% more revenue than business class and 33% more than economy. British Airways says it is almost as profitable as its Club cabins.

I asked Tim Clark why it took the airline so long (responses have been lightly edited for clarity):

“We took the view that if you looked at their [competitor’s] economy, compared to our economy, there was no need to do a premium economy cabin. What they did with their premium cabin was basically the same as our economy.

The way we thought was perhaps a little bit cavalier, a little bit arrogant, but we really gilded the lily in economy. However the time came when it became apparent, talking to my peer group, that they were quite bullish about the success of their premium cabins and I thought, well, we need to try it.

Then of course went through the pain of planning this out to a fourth decimal place to see that we had got our sums right, which was all done pre-covid. And then everything stopped for covid and when we started again, the fares we could achieve jumped by about 125% compared to the plan. It immediately went into profit, and has stayed that way.

Our main worry was that premium economy would take a bit out of business class, so this was factored into the maths. The idea was that all of the people who bought the high fare buckets in economy would trade up. And that’s exactly what happened, and more. Even people who were paying less than the [highest economy fares] also traded up. Very few came down [from business class to premium economy]. Some smaller businesses who are a bit budget conscious who did trade down travelled more with us. The bottom line is that the income in absolute terms was great.”

What about the customer experience?

“I didn’t want to do what I’d seen so many do, which was to just add more pitch [leg room] and not a lot else. I said let’s really do an ‘Emirates’ on it, so I put that wood in the cabins and did all these lovely seats. We took Mercedes S Class-style seats and put them into Premium Economy and made it look like The Ritz Carlton on steroids. And I think it works.”

Emirates opted for cream leather seats which – when the renders were revealed – generated lots of discussion online as to how durable they would be and the maintenance required to keep them cream.

“When we launched in the early days, the colour palettes that we chose were all light but everybody else was dark, black and brown and grey. I thought, why would you create a little tube space and make it so claustrophobic by putting dark colours in? What you need to do is lighten it up, which is what we did. We’ve always done that. The leather seats in premium economy and the colours of those are part of our DNA.

We positioned it on the main deck between the front two doors with 56 seats. And now [people in business class on the top deck] come out and say ‘Mr. Clark, there’s a party going on downstairs. You’ve got to come and look.’ They’re all standing up and they’re having a wonderful time and I said, ‘Oh, my God, I knew we put too much booze on!’

But you know, all that we are offering, putting more crew on, the better quality of wine, even putting business class wines in there, introducing our own sort of champagne in there, lifting the food offering …. Great craic, it was a wonderful, wonderful experiment, which has clearly paid off.

I’m just a little bit worried about whether it will work on our regional operations when we put it on the A350. It will be buzzing around Kuwait, Oman and Cairo – will it perform? We’ll see.”

Emirates’ new business class is coming

Speaking of the A350, let’s talk about their imminent arrival. Emirates has 65 on order, including a top-up order of 15 that it made at the Dubai Air Show last year. So far, it only has the smaller A350-900 on order although the airline is very much interested in ordering the larger -1000 – more on that in another article.

The first A350 is pencilled in to arrive in the late summer, likely around August, and will introduce a new business class cabin for the airline.

Despite its (fantastic) marketing and reputation, Emirates hasn’t always been at the forefront of customer experience for premium travellers. It is about to begin process of refurbishing the now-dated 2-3-2 layout that you find on many of its Boeing 777 aircraft.

“We’re going to do the best we can with our business cabin, it will be a 1-2-1 layout rather than 2-3-2, spacious. In the early stage it will replicate what we do on the A380 on the upper deck in business, but with slightly more room and more modern technology both in the design and build of it.”

Initial A350 deliveries will come with something of a half-way house business class cabin. This will be superseded by an even newer business class with later deliveries, although Sir Tim Clark did not specify when:

“The next stage after [the initial A350 deliveries] will be a new design for business class. I’m not going to say what it is, but I just wish that we had a patent on the doors that we designed for the A340-500 suites because everybody’s using putting doors on now! It will be a great aeroplane, it’s going to be extremely comfortable.”

The 777X fleet – when they arrive in late 2025 or early 2026 – will also feature a new seat. What this will look like is still under wraps, although Emirates has signed a $1billion deal with French seatmaker Safran which also supplies Emirates’ A380 seat. Assuming Emirates goes for a customised, off-the-shelf seat then it really has three options:

• Safran’s Unity seat, selected by Qantas for their ultra-longhaul A350s and the backbone of Air India’s upcoming fleet refurbishment. This is a staggered layout, similar to what Emirates already flies on its A380s
• Safran’s Versa seat, a herringbone (angled) configuration that Air France is currently installing on its A350s
• Safran’s Fusio seat. This would be the most impressive choice, as it is widely seen as a larger seat with more personal space. It is the seat flown by ANA on its refurbished Boeing 777 fleet and has been widely praised.

Emirates’ A350s will come in a three-class configuration with business, premium economy and economy. Sir Tim confirmed that it would feature 312 seats, slightly fewer than the 324 seats that Air France has on its A350-900s or the 348 on Iberia’s less premium-heavy birds.

Sadly, the A350s are unlikely to see regular service to the UK. This is largely due to their size as they are significantly smaller than the A380, which can accommodate up to 615 passengers in the most dense configurations Emirates has. The UK is the airline’s strongest market and even airports such as Glasgow now see daily A380 services.

Part 2 of this interview covers Sir Tim’s views on a is Boeing and Airbus woes, including the 777X and A350-1000.

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